Tuesday January 13, 09:42 AM
British supermarket Tesco says Christmas sales jump 11.6%
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LONDON (AFP) - British supermarket chain Tesco (LSE: TSCO.L - news) said Tuesday that group sales grew 11.6 percent in the crucial run-up to Christmas, but said that trading remained "challenging" because of the uncertain economic climate.
"The Tesco Group has delivered a strong performance and record sales over the Christmas and New Year period," Britain's biggest retailer said in a trading update on the key festive period.
"Group sales increased by 11.6 pecent during the seven weeks to 10 January 2009, driven by continued rapid international expansion and steady growth in the UK.
"This growth is against the background of challenging trading conditions in all of our markets caused by the global economic slowdown."
However, it also emerged Tuesday that British retailers suffered their worst December for 14 years as consumers tighten their belts in the face of a looming recession, according to a survey from the British Retail Consortium (BRC).
But Tesco said its British sales excluding petrol, on a like-for-like basis that strips out the effect of new floor space, rose by a modest 2.5 percent in the reporting period, compared with the same part of the previous year.
Tesco finance director Andrew Higginson said that the British Christmas trading figure was the weakest "probably since the last recession" in the 1990s.
But he added: "In a price sense we are very competitive in the market now ... so we are happy with our position."
International sales soared by 32.7 percent, with Europe up 24 percent and Asia gaining 43 percent, the group said.
In the United States, where Tesco launched a chain of small food stores in 2007 under the "Fresh & Easy" banner, sales growth was also strong across its 28 branches.
"Fresh & Easy has been coping well with a severe downturn in the West Coast markets in which it trades," Tesco added.
"Like-for-like growth is strongly double-digit for the 28 stores which have now been open more than a year."
Tesco is the world's third-biggest retailer. US giant Wal-Mart is the largest, followed by French group Carrefour (Paris: FR0000120172 - news) .
British industry body the BRC said Tuesday that like-for-like sales in the retail sector fell 3.3 percent last month compared with December 2007, according to its KPMG Retail Sales Monitor.
A number of high-profile British retailers have disappeared in recent weeks as the country stands on the brink of recession.
General retailer Woolworths (Munich: 886853 - news) last week closed the doors on a century of trading, while clothing-to-food retailer Marks & Spencer (LSE: MKS.L - news) announced it would cut up to 1,230 jobs and shut 27 stores.
Tesco will publish its 2008/2009 annual results on April 21. The group's financial year runs until the end of February.
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